HR Practices in Small and Medium-Sized Enterprises: The Perspective of Organizational Ecology

Abstract

When Taiwan’s economic development is mentioned, the achievement of small and medium-sized enterprises (SMEs) is the most pivotal to reveal. SMEs have always been the bedrock of Taiwan's economy. How SMEs find their niche and survive in the turbulent market in Taiwan was the prime motivation of this study. Adopting the perspective of organizational ecology, this research attempted to uncover partially how SMEs make it and what the secret of their success is through a close examination of their human resource practices. The objective of this study was to explore the relationship among organizational ecology, HR practices, and organizational performance. Data for the study were collected from a survey questionnaire sent to 441 biotechnology-related companies. Data collection effort yielded 96 responses, which equated to a response rate of 21.77%. Of the 96 responses, 83 qualified as SMEs, therefore the valid response rate was 18.82%. The result shows HR practices in general have a positive influence on organizational performance. However, only one aspect of organization ecology, organizational inertia, was proved to have an influence on organizational performance through HR practices adopted by companies. This study did not find liability of newness, liability of smallness, and population density having an influence on SMEs. The study also examined the most effective and the most adopted HR practices in Taiwan’s biotechnology SMEs. The result shows these SMEs put individual HR practices in different priorities during different stages of business life cycle. Implications and future research suggestions are discussed.When Taiwan’s economic development is mentioned, the achievement of small and medium-sized enterprises (SMEs) is the most pivotal to reveal. SMEs have always been the bedrock of Taiwan's economy. How SMEs find their niche and survive in the turbulent market in Taiwan was the prime motivation of this study. Adopting the perspective of organizational ecology, this research attempted to uncover partially how SMEs make it and what the secret of their success is through a close examination of their human resource practices. The objective of this study was to explore the relationship among organizational ecology, HR practices, and organizational performance. Data for the study were collected from a survey questionnaire sent to 441 biotechnology-related companies. Data collection effort yielded 96 responses, which equated to a response rate of 21.77%. Of the 96 responses, 83 qualified as SMEs, therefore the valid response rate was 18.82%. The result shows HR practices in general have a positive influence on organizational performance. However, only one aspect of organization ecology, organizational inertia, was proved to have an influence on organizational performance through HR practices adopted by companies. This study did not find liability of newness, liability of smallness, and population density having an influence on SMEs. The study also examined the most effective and the most adopted HR practices in Taiwan’s biotechnology SMEs. The result shows these SMEs put individual HR practices in different priorities during different stages of business life cycle. Implications and future research suggestions are discussed.